TCREUR_Public/130510.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

             Friday, May 10, 2013, Vol. 14, No. 92

                            Headlines



B E L G I U M

IDEAL STANDARD: Fitch Cuts LT Issuer Default Rating to 'CC'


G E R M A N Y

ARZBERG-PORZELLAN GMBH: Chapter 15 Case Summary


I R E L A N D

STRAWINSKY I: Moody's Hikes Rating on Class C Notes to 'Caa2'
XTRAVISION: Twenty Shops to Close; 120 Jobs Affected


K A Z A K H S T A N

ATF BANK: Fitch Cuts Long-Term Issuer Default Ratings to 'B-'


L A T V I A

* LATVIA: Faces Banking Risks Not Similar to Cyprus, Fitch Says


L U X E M B O U R G

AGRI SECURITIES: Fitch Lowers Rating on Class B Notes to 'B+sf'
PACIFIC DRILLING: Moody's Assigns 'B2' CFR; Outlook Positive


N E T H E R L A N D S

CLONDALKIN INDUSTRIES: Moody's Affirms 'B3' CFR; Outlook Positive


P O L A N D

CENTRAL EUROPEAN: Gets Final OK to Hire Ernst & Young as Auditors
CENTRAL EUROPEAN: Has Until June 20 to File Schedules, Statements


R O M A N I A

OLTCHIM: To Lay Off Around 900 Employees Beginning Next Week


R U S S I A

BASHNEFT JSC: Fitch 'BB' Affirms Issuer Default Ratings
FAR-EASTERN SHIPPING: S&P Assigns 'BB-' CCR; Outlook Stable
NORD GOLD: Fitch Assigns Sr. Unsec. 'BB-' Rating to $500MM Notes


S P A I N

BANCO POPULAR 1: S&P Lowers Rating on Class D Notes to 'BB-'
* SPAIN: 2,800 Spanish Firms & Families Declare Bankruptcy in Q1
* SPAIN: League President Mulls Debt Reduction for Ailing Clubs


S W I T Z E R L A N D

BARRY CALLEBAUT: Moody's Cuts Long-Term Issuer Rating to 'Ba1'


U N I T E D   K I N G D O M

ECO-BAT TECH: Moody's Affirms 'Ba3' CFR; Outlook Negative
EQUINOX PLC: S&P Lowers Rating on Class C Notes to B-
NORTHERN ROCK: Harbinger Loses Bid to Seek Compensation for Stake
TAURUS CMBS 2006-2: S&P Lowers Rating on Class A Notes to 'BB'
* UK: Fewer Companies Go Bust in Scotland, Experian Index Shows


X X X X X X X X

* EUROPE: Lawmakers Seek Powers to Enforce Bank Writedown Law
* EUROPE: Building Materials Sector Rely on US Housing Recovery
* Moody's Expects Low Repayment Rate for European CMBS Loans
* Fitch Says European Lost Decade Would Leave Few Firms Unscathed
* BOOK REVIEW: The Oil Business in Latin America: The Early Years


                            *********


=============
B E L G I U M
=============


IDEAL STANDARD: Fitch Cuts LT Issuer Default Rating to 'CC'
-----------------------------------------------------------
Fitch Ratings has downgraded Ideal Standard International SA's
Long-term Issuer Default Rating (IDR) to 'CC' from 'CCC' and
affirmed its Short-term IDR at 'C'. No Outlook is assigned to the
ratings. Fitch has also downgraded Ideal Standard International's
EUR275m senior secured notes to 'CC from 'CCC+' with a Recovery
Rating of 'RR4' from the previous 'RR3'.

Key Rating Drivers

The rating downgrade reflects Fitch's concerns about Ideal
Standard's ability in finding the additional financial resources
necessary to support its business which is expected to remain
cash-burning in the next 12-18 months. A material improvement in
trading conditions is unlikely, given the difficult market
outlook, and the group's financial structure looks unsustainable,
absent a significant increase in free cash flow generation.

Negative Free Cash Flow

Free cash flow (FCF) remained negative in 2012, although the cash
burn significantly reduced thanks also to lower cash
restructuring costs, better working-capital management and lower
capex. Management has implemented cash saving measures, including
de-stocking of inventories, and restructuring costs should
further decline in 2013. However, Fitch expects FCF to remain
negative in 2013, with major improvements remaining subject to a
recovery in trading conditions and operating profitability that
are unlikely in the short-term.

Weak Liquidity

Ideal Standard's liquidity at year-beginning comprised EUR33
million of cash (including the EUR7 million cash deposit in
Bulgaria), a EUR15 million undrawn revolving credit facility
(RCF) and some EUR3 million from other available facilities.
Fitch believes this liquidity to be weak in the context of the
expected cash needs for 2013. However, Ideal Standard was
actively seeking additional financial resources, including new
factoring and credit facilities at some of its operating
subsidiaries. Some one-off deals (i.e., disposal of non-core
assets) could also help to raise fresh money. These actions would
give some headroom for 2013, but the financial structure looks
unsustainable in the long-term, if a material improvement in the
operating cash flow does not materialize.

Negative Market Outlook

The outlook for the bathroom products market is still gloomy for
2013, especially for Italy and UK (the main markets for Ideal
Standard), where respectively high- and low-single digit declines
are expected this year. Growth could come mainly from Eastern
Europe (mainly Russia), Egypt and Middle East. Despite difficult
market conditions, Fitch expects Ideal Standard to modestly
increase revenue thanks to pricing and sales network expansion.

Weak Margins

The industrial restructuring was completed in 2011, but savings
obtained from these measures have been largely offset by the
decline in volumes and the consequent under-absorption of fixed
costs. Operating profitability therefore remained weak (2.2%
EBITDA margin in 2012) and Fitch expects the EBITDA margin to
show only a marginal improvement in 2013..

Market Leader

Ideal Standard's rating reflects its position as a leader in bath
accessories in Europe, where it ranks first or second in various
markets in ceramics and fittings. The group also owns a
comprehensive portfolio of well-known brands covering a wide
spectrum of market segments from entry level to luxury products.

Rating Sensitivities:

Positive: Future developments that could lead to positive rating
actions include:

A significant improvement in the liquidity profile, thanks to new
additional financial resources, either from new credit facilities
or one-off deals.

Negative: Future developments that could lead to negative rating
action include:

A further deterioration in the liquidity, leading to the company
defaulting on some obligations (interest or principal).



=============
G E R M A N Y
=============


ARZBERG-PORZELLAN GMBH: Chapter 15 Case Summary
-----------------------------------------------
Chapter 15 Petitioner: Volker Bohm

Chapter 15 Debtor: Arzberg-Porzellan GmbH
                   Fabrikweg 41
                   95706
                   Schirnding
                   Germany

Chapter 15 Case No.: 13-44255

Type of Business: The debtor is a company based in Germany that
                  manufactures household products.

Chapter 15 Petition Date: May 6, 2013

Court: U.S. Bankruptcy Court
       Eastern District of Missouri (St. Louis)

Judge: Barry S. Schermer

Debtor's Counsel: Sherry K. Dreisewerd, Esq.
                  POLSINELLI SHUGHART, P.C.
                  100 South Fourth Street, Suite 1000
                  St. Louis, MO 63102
                  Tel: (314) 889-8000
                  Fax: (314) 231-1776
                  E-mail: sdreisewerd@polsinelli.com

Estimated Assets: US$1,000,001 to US$10,000,000

Estimated Debts: US$1,000,001 to US$10,000,000

The Company did not file a list of creditors together with its
petition.



=============
I R E L A N D
=============


STRAWINSKY I: Moody's Hikes Rating on Class C Notes to 'Caa2'
-------------------------------------------------------------
Moody's Investors Service has taken these rating actions on the
notes issued by Strawinsky I P.L.C.:

EUR43M Class A2 Senior Secured Floating Rate Notes due 2024,
Upgraded to Aa2 (sf); previously on Nov 7, 2011 Upgraded to Baa3
(sf)

EUR23M Class B Senior Secured Floating Rate Notes due 2024,
Upgraded to Baa2 (sf); previously on Nov 7, 2011 Upgraded to B3
(sf)

EUR19M Class C Senior Secured Deferrable Floating Rate Notes due
2024, Upgraded to Caa2 (sf); previously on Nov 7, 2011 Confirmed
at Ca (sf)

Moody's also affirmed the ratings of the Class A1, Class D and
Class E notes issued by Strawinsky I P.L.C.:

EUR105.5M (with current outstanding balance of EUR12.75M) Class
A1-T Senior Secured Floating Rate Notes due 2024, Affirmed Aaa
(sf); previously on Nov 7, 2011 Upgraded to Aaa (sf)

EUR58.63M (with current outstanding balance of EUR0.8M, GBP3M, $
2.3M) Class A1-R Senior Secured Floating Rate Notes due 2024,
Affirmed Aaa (sf); previously on Nov 7, 2011 Upgraded to Aaa (sf)

EUR12M Class D Senior Secured Deferrable Floating Rate Notes due
2024, Affirmed Ca (sf); previously on Jun 25, 2009 Downgraded to
Ca (sf)

EUR10.27M Class E Senior Secured Deferrable Floating Rate Notes
due 2024, Affirmed C (sf); previously on Jun 25, 2009 Downgraded
to C (sf)

Ratings Rationale:

According to Moody's, the rating actions taken on the notes
results primarily from the significant amortization of the Class
A-1 Notes, which have been paid down by approximately 88% of
their original balance, or approximately EUR47 million since the
last rating action in November 2011.

As a result of this deleveraging, the overcollateralization
ratios (or "OC ratios") for the senior and mezzanine notes,
namely, Class A, Class B and Class C Notes, have improved since
the rating action in November 2011. As of the latest trustee
report dated April 2013, the Class A/B, Class C, Class D and
Class E OC ratios are reported at 130.7%, 105.9%, 93.6% and
84.6%, respectively, versus October 2011 levels of 117.57%,
102.15%, 94.04% and 87.71%, respectively.

Moody's also notes that the documentation of Strawinsky I P.L.C.
CLO allows for an event of default ("EoD") to be triggered by the
Class A1 note holders, should the Class A/B OC test fall below
100%. Such EoD risk is now considered as a remote likelihood,
with the current class A/B OC ratio of 130.7%, up from 117.57%
compared to the last rating action in November 2011.

Moody's notes that OC tests for Class C, Class D and Class E
notes continue to fail and there still remain deferred interest
payments in respective classes of notes.

In its base case, Moody's analyzed the underlying collateral pool
to have a performing par and principal proceeds balance of EUR
130.5 million, defaulted par of EUR12.9 million, a weighted
average rating factor ("WARF") of 4847, a weighted average
recovery rate upon default of 45.62% for a Aaa liability target
rating, a diversity score of 19 and a weighted average spread of
3.05%. The default probability is derived from the credit quality
of the collateral pool and Moody's expectation of the remaining
life of the collateral pool. The average recovery rate to be
realized on future defaults is based primarily on the seniority
of the assets in the collateral pool. For a Aaa liability target
rating, Moody's assumed that 89.05% of the portfolio exposed to
senior secured corporate assets would recover 50% upon default,
while the remainder non first-lien loan corporate assets would
recover 10%. In each case, historical and market performance
trends and collateral manager latitude for trading the collateral
are also relevant factors. These default and recovery properties
of the collateral pool are incorporated in cash flow model
analysis where they are subject to stresses as a function of the
target rating of each CLO liability being reviewed.

In addition to the base case, Moody's also performed sensitivity
analyses on key parameters for the rated notes:

1) Deterioration of credit quality to address the refinancing and
sovereign risks -- Approximately 46.7% of the portfolio is rated
B3 and below with maturities between 2014 and 2016, which may
create challenges for issuers to refinance. The portfolio is also
exposed to 17% of obligors located in Greece and Spain. Moody's
considered the scenario where the WARF of the portfolio was
increased to 5,896 by forcing to Ca the credit quality of 50% of
such exposures subject to refinancing or sovereign risks. This
scenario generated model outputs that were approximately one to
two notches from these rating actions.

2) High concentration to securities rated Caa1 or below --
Approximately 31% of the portfolio is rated Caa1 or below.
Moody's considered the scenario where all Caa1 and below rated
assets are forced to Ca with no recovery, by increasing WARF of
the portfolio to 5619/ This scenario generated model outputs that
were approximately two notches from these rating actions.

Moody's notes that this transaction is subject to a high level of
macroeconomic uncertainty, which could negatively impact the
ratings of the notes, as evidenced by 1) uncertainties of credit
conditions in the general economy and 2) the large concentration
of speculative-grade debt maturing between 2014 and 2016 which
may create challenges for issuers to refinance. CLO notes'
performance may also be impacted either positively or negatively
by 1) the liquidation agents behavior and 2) divergence in legal
interpretation of CDO documentation by different transactional
parties due to embedded ambiguities.

Sources of additional performance uncertainties:

1) Portfolio Amortization: The main source of uncertainty in this
transaction is whether delevering from unscheduled principal
proceeds will continue and at what pace. Delevering may
accelerate due to high prepayment levels in the loan market
and/or collateral sales by the liquidation agent, which may have
significant impact on the notes' ratings.

2) Moody's also notes that around 63% of the collateral pool
consists of debt obligations whose credit quality has been
assessed through Moody's credit estimates. Large single exposures
to obligors bearing a credit estimate have been subject to a
stress applicable to concentrated pools as per the report titled
"Updated Approach to the Usage of Credit Estimates in Rated
Transactions" published in October 2009.

3) The deal has exposure to non-EUR denominated assets.
Volatilities in foreign exchange rate will have a direct impact
on interest and principal proceeds available to the transaction,
which may affect the expected loss of rated tranches.

4) Recovery of defaulted assets: Market value fluctuations in
defaulted assets reported by the trustee and those assumed to be
defaulted by Moody's may create volatility in the deal's
overcollateralization levels. Further, the timing of recoveries
and the manager's decision to work out versus sell defaulted
assets create additional uncertainties. Moody's analyzed
defaulted recoveries assuming the lower of the market price and
the recovery rate in order to account for potential volatility in
market prices.

The principal methodology used in this rating was "Moody's
Approach to Rating Collateralized Loan Obligations" published in
June 2011.

Moody's modeled the transaction using the Binomial Expansion
Technique, as described in Section 2.3.2.1 of the "Moody's
Approach to Rating Collateralized Loan Obligations" rating
methodology published in June 2011.

Under this methodology, Moody's used its Binomial Expansion
Technique, whereby the pool is represented by independent
identical assets, the number of which is being determined by the
diversity score of the portfolio. The default and recovery
properties of the collateral pool are incorporated in a cash flow
model where the default probabilities are subject to stresses as
a function of the target rating of each CLO liability being
reviewed. The default probability range is derived from the
credit quality of the collateral pool, and Moody's expectation of
the remaining life of the collateral pool. The average recovery
rate to be realized on future defaults is based primarily on the
seniority and jurisdiction of the assets in the collateral pool.

The cash flow model used for this transaction, is Moody's EMEA
Cash-Flow model.

This model was used to represent the cash flows and determine the
loss for each tranche. The cash flow model evaluates all default
scenarios that are then weighted considering the probabilities of
the binomial distribution assumed for the portfolio default rate.
In each default scenario, the corresponding loss for each class
of notes is calculated given the incoming cash flows from the
assets and the outgoing payments to third parties and
noteholders. Therefore, the expected loss or EL for each tranche
is the sum product of (i) the probability of occurrence of each
default scenario; and (ii) the loss derived from the cash flow
model in each default scenario for each tranche. Therefore,
Moody's analysis encompasses the assessment of stressed
scenarios.

In addition to the quantitative factors that are explicitly
modeled, qualitative factors are part of the rating committee
considerations. These qualitative factors include the structural
protections in each transaction, the recent deal performance in
the current market environment, the legal environment, specific
documentation features, the collateral manager's track record,
and the potential for selection bias in the portfolio. All
information available to rating committees, including
macroeconomic forecasts, input from other Moody's analytical
groups, market factors, and judgments regarding the nature and
severity of credit stress on the transactions, may influence the
final rating decision.

On March 12, 2013, Moody's released a report, which describes how
sovereign credit deterioration impacts structured finance
transactions and the rationale for introducing two new parameters
into its general analysis of such transactions. In the coming
months, Moody's will update its methodologies relating to multi-
country portfolios including that of collateralized Loan
obligations (CLOs) as well as that of other types of
collateralized debt obligations (CDO), asset-backed commercial
paper (ABCP) and commercial mortgage-backed securities (CMBS).
Once those methodologies are updated and implemented, the rating
of the notes affected by this rating action may be negatively
affected.


XTRAVISION: Twenty Shops to Close; 120 Jobs Affected
----------------------------------------------------
BreakingNews.ie reports that 20 Xtravision shops are to close
with the loss of 120 jobs.

According to BreakingNews.ie, 132 shops for the company will stay
open, after the company went into recievership last week.

BreakingNews.ie says nine shops in the republic will close within
the next week, along with 11 shops in the north.

Xtravision is an Irish rental chain.



===================
K A Z A K H S T A N
===================


ATF BANK: Fitch Cuts Long-Term Issuer Default Ratings to 'B-'
-------------------------------------------------------------
Fitch Ratings has downgraded ATF Bank JSC's Long-term Issuer
Default Ratings (IDRs) to 'B-' from 'BBB-'. The Outlook is
Stable. A full list of rating actions is at the end of this
commentary.

Key Rating Drivers

The downgrade reflects the removal from the ratings of potential
support from UniCredit S.p.A. ('BBB+'/Negative) following ATF's
announcement on May 2, 2013 that UniCredit had completed the sale
of the bank to KazNitrogenGaz LLP (not rated). KazNitrogenGaz is
a Kazakh-domiciled holding company, fully owned by local
businessman Galimzhan Esenov, and also holds majority stakes in
two small Kazakh insurance companies.

After the removal of support from UniCredit, ATF's Long-term IDRs
are aligned with its Viability Rating (VR). The ratings reflect
the bank's weak asset quality and negative profitability during
the past four years, as well as some uncertainty regarding the
bank's strategy following the change of ownership and the extent
of any leverage taken on by the new shareholder as a result of
the acquisition. At the same time, the ratings are supported by
ATF's currently comfortable liquidity and an expected improvement
in performance.

Rating Sensitivities

ATF's ratings could be upgraded if the bank improves asset
quality metrics and performance, related party lending remains
moderate following the acquisition and shareholder leverage in
Fitch's view does not represent a significant contingent risk for
the bank. A weakening of asset quality and loss absorption
capacity or increase in related party exposures/shareholder risks
could result in downward pressure on the ratings.

The rating actions are:

Long-term foreign and local currency IDRs: downgraded to 'B-'
from 'BBB-', Outlook Stable, removed from Rating Watch Negative
(RWN);

Short-term foreign currency IDR: downgraded to 'B' from 'F3',
removed from RWN

National Long-term Rating: downgraded to 'BB-(kaz)' from
'AA(kaz)', Outlook Stable, removed from RWN

Viability Rating: affirmed at 'b-'

Support Rating: downgraded to '5' from '2', removed from RWN

Support Rating Floor: assigned at 'No Floor'

Senior unsecured debt downgraded to 'B-' from 'BBB-', removed
from RWN, Recovery Rating assigned at 'RR4'

National senior unsecured debt rating downgraded to 'BB-(kaz)'
from 'AA(kaz)', removed from RWN

Subordinated debt downgraded to 'CCC' from 'BB+', removed from
RWN, Recovery Rating assigned at 'RR5'

National subordinated debt rating downgraded to 'B(kaz)' from
'AA-(kaz)', removed from RWN

Perpetual subordinated notes downgraded to 'CC' from 'B+',
removed from RWN, Recovery Rating assigned at 'RR6'



===========
L A T V I A
===========


* LATVIA: Faces Banking Risks Not Similar to Cyprus, Fitch Says
---------------------------------------------------------------
Fitch Ratings says that the banking sector risks in Latvia
(BBB/Positive) are fundamentally different to those facing Cyprus
(B/RWN) before its bail-out. However, the Cyprus fallout has
raised the risks on Latvia's bid for euro accession in January
2014 amid a fluid political environment in Europe. Nonetheless,
Fitch's base expectation remains that Latvia will be invited to
join the euro area in January 2014.

Recent events in Cyprus following the decision to bail-in
uninsured depositors have drawn attention to Latvia, given the
high reliance of its banking sector on non-resident deposits. "We
believe that euro entry remains Latvia's overriding aim and the
country will therefore be prepared to undertake targeted
structural reforms to contain excessive future foreign capital
flows into its banking system and perhaps submit to additional
conditionality. These reforms may range from measures to tame
banks' appetite for non-resident business to others reducing
Latvia's attractiveness as a banking hub," Fitch says.

"When we upgraded Latvia's FC IDR to 'BBB'/Positive in November
2012, we noted that persistent increases in non-resident deposits
could exert downward pressure on Latvia's sovereign ratings, as
they would render banks vulnerable to a liquidity shock in the
event of a sudden deposit outflow. Non-resident deposits --
predominantly from Russian beneficiaries -- account for 49% of
total deposits (higher than Cyprus's 37%) and are concentrated
among domestic banks. In context though, non-resident deposits
are only 40% of GDP in Latvia compared with about 140% of GDP in
Cyprus.

"Despite rapid private sector deleveraging since 2008, Latvia had
the highest loan-to-deposit ratio in Emerging Europe and the
second highest among Fitch-rated global sovereigns in 2012 at
196% (compared with 123% in Cyprus). Nevertheless, at 1.3x GDP,
Latvia's banking sector is much smaller than Cyprus's (6.7x GDP)
and the Latvian economy is less reliant on the financial services
sector, which accounts for 3.5% of GDP compared with 9% in
Cyprus.

"Fitch believes that in case of need, the government of Latvia
would support the domestic banks that are systemically important.
We estimate their assets at 35% of GDP. We also expect that
foreign-owned banks (two thirds of the sector) will absolve the
sovereign from material contingent liabilities, as was seen in
the Baltic crisis of 2008-2009."

'Latvia and Cyprus: Banking on a Different Scale' is available at
www.fitchratings.com or by clicking on the link above. The report
compares and contrasts Cyprus and Latvia with a focus on their
banking systems' fundamental characteristics, vulnerabilities and
capacity to inflict damage on the sovereign balance sheet.



===================
L U X E M B O U R G
===================


AGRI SECURITIES: Fitch Lowers Rating on Class B Notes to 'B+sf'
---------------------------------------------------------------
Fitch Ratings has downgraded Agri Securities S.r.l. Series 2008's
(Agri Securities 2008) class B notes, as follows:

EUR235.4m class A notes affirmed at 'AAsf'; Outlook Negative

EUR136.4m class B notes downgraded to 'B+sf' from 'BBsf'; Outlook
Negative

Agri Securities 2008 is a securitization of performing leases on
the following types of assets: real estate (55% at closing and
82.7% on the latest payment date), equipment (33%, 14.3%),
industrial vehicles (7%, 2.4%) and autos (5%, 0.6%). The assets
pay mainly floating rate with monthly instalments. The notes pay
quarterly at a floating rate based on EURIBOR.

Key Rating Drivers

The transaction's performance is largely below the agency's
expectations and is worse than other deals that Fitch rates from
the same originator (Iccrea BancaImpresa, 'BBB+'/Negative/'F2')
rated by Fitch. However, credit enhancement (CE) for the class A
notes, which has built up to above 40% from 17.5% at closing due
to the sequential amortization of the notes, is considered
adequate for the current rating.

CE available to the class B notes is about 10% of the outstanding
assets and is only provided by collateral funded by the unrated
40.6m class C notes as the transaction's debt service reserve is
only available for liquidity support. Additionally, interest on
the class B notes is currently deferred as cumulative losses are
equal to 8.7% of the original collateral, higher than the 7.8%
threshold level. The deferred interest does not accrue interest
and will be paid once the class A notes are paid in full (or
recoveries from the assets are sufficient to drive cumulative
losses down), if there are sufficient funds.

The 2012 annual default rate was 6.7% of the end-2011 collateral
balance, which is also in excess of Fitch's market benchmark
performance indicator for similar collateral which stands at 5%.
A continuation of this trend implies a default rate of 25% when
measured against the current collateral balance. As a result -
and in light of the deteriorating economic outlook for Italy
('BBB+'/Negative/'F2'), Fitch has revised the transaction's
lifetime default expectation to 20%, of which 11.4% have been
realized so far. Although on the latest payment date real estate
was the worst performing sub-pool, the asset type migration
towards real estate is not considered detrimental based on the
delinquency and default ratios.

The defaulted amount in the Q113 was EUR19.1 million, or 4.2% of
the outstanding collateral at the beginning of the period. As a
result, the gross excess spread was insufficient to cover the
principal losses and a principal deficiency ledger (PDL) of
EUR1.4m remained uncleared. The gross excess spread has steadily
been healthy at above 5%, but the period defaults on the latest
payment date caused the net excess spread to be negative (-1.3%
on an annualized basis).

Rating Sensitivities

The period defaults in Q113 were higher than Fitch's revised
expectations. If future performance continues at this level,
further downgrades may occur even on the class A notes despite
the high CE.

Finally, sharp increases in the interest rate may make the
deferred unpaid class B interest amount difficult to sustain,
although at current rate this does not appear to be an immediate
concern, also given that the debt service reserve can be used to
pay the shortfall and has a floor of EUR5m.

Fitch stressed the annual default benchmark performance indicator
by applying the consumer ABS rating criteria rather than the SME
CLO rating criteria due to the limited amount of available
information (eg loan-by-loan internal ratings of the originator),
and the fact that Fitch has observed multiple deals with similar
assets and is comfortable that this methodology is adequate.


PACIFIC DRILLING: Moody's Assigns 'B2' CFR; Outlook Positive
------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating
and a B3-PD Probability of Default Rating to Pacific Drilling SA
in conjunction with its proposed US$1.5 billion debt offering.
The debt will be a combination of senior secured notes and a
senior secured term loan B. Proceeds will be used for general
corporate purposes and to repay approximately US$1.35 billion of
project finance debt that is secured by four operating drill
ships. Moody's assigned a B1 rating to the proposed senior
secured debt. The existing rating of the secured debt at Pacific
Drilling V Ltd. was upgraded to B2 from B3. The outlook is
positive.

"The refinancing of Pac Drilling's project finance loan marks an
evolutionary step forward in the company's capital structure,"
said Stuart Miller, Moody's Vice President. "While collateral is
still segregated and assigned to individual debt instruments,
cross-default provisions and guarantees between the parent and
its subsidiaries creates a more level playing field for the
various creditor groups, especially for creditors that were
previously outside the project finance ring-fencing where the
operating drillships were located."

A complete list of rating actions is as follows:

Ratings assigned

Pacific Drilling SA

Assigned a CFR of B2

Assigned a PDR of B3-PD

Assigned a senior secured note rating of B1 (LGD2-26%)

Assigned a senior secured term loan B rating of B1 (LGD2-26%)

Assigned a Speculative Grade Liquidity rating of SGL-3

Ratings upgraded

Pacific Drilling V Ltd.

Upgraded senior secured rating to B2 (LGD3-39%) from B3

Change in rating outlook

Pacific Drilling SA

Assigned a positive outlook

Ratings Withdrawn

Pacific Drilling V Ltd.

Withdrew CFR

Withdrew PDR

Withdrew SGL

Ratings Rationale:

The B2 CFR for PacDrilling reflects the company's very high
financial leverage (debt to EBITDA of 8.5x as of December 31,
2012), and its small but emerging scale within the deepwater
offshore drilling industry. The rating also considers the capital
intensive nature of the deepwater drilling market, which requires
significant upfront capital several years before cash flow is
generated from the investment. With four rigs operating and four
rigs at various stages of construction there are significant
start-up risks in any forward looking projection, especially with
two of the rigs un-contracted.

The rating is supported by PacDrilling's very high quality fleet
of rigs, its diversified geographic presence in three major
offshore markets, and strong operating track record and high
dayrates. PacDrilling's US$3.4 billion backlog is comprised
entirely of investment grade operators, including Chevron
Corporation (Aa1 stable), Total SA (Aa1 negative), and Petrobras
(A3 negative). Moody's also considers the strong fundamentals in
the deepwater offshore drilling market, where all of
PacDrilling's current and future drillships will operate. The
positive outlook for PacDrilling reflects the expectation that
the rig fleet will grow from four to six in the next twelve
months as two of the drillships that are under construction are
delivered and begin to generate cash flow.

PacDrilling V is a wholly owned subsidiary of PacDrilling. Its
creditworthiness is closely linked to PacDrilling through cross-
defaults and cross guarantees. The upgrade of PacDrilling V's
senior secured debt reflects the greater value associated with
the PacDrilling guarantee once the project finance restrictions
were lifted, as well as the nearing completion of the
construction of the Khamsin drillship, the primary collateral for
PacDrilling V's debt. The positive outlook for PacDrilling V is
primarily based on the linkage with its parent, PacDrilling and
its positive outlook.

The senior secured notes and the term loan B at PacDrilling are
rated B1, one notch higher than the B2 CFR. The notes and term
loan benefit from a first lien on the four operating drillships
as well as a security interest in the equity of its subsidiaries
that own the four rigs that are under construction. The pledge of
the equity interest in the subsidiaries is subordinated to the
US$1.5 billion of debt that is at the subsidiary level. The
US$500 million of senior secured notes at PacDrilling V is rated
B2, one notch lower than the debt at PacDrilling to reflect its
first lien against a drillship that is not yet generating cash
flow as well as the unsecured guarantee of PacDrilling.

PacDrilling's SGL-3 rating indicates adequate liquidity through
the end of 2014. Through this period, capital expenditures are
projected to total approximately US$1.8 billion. With nearly
US$450 million of cash on hand, an estimate of US$300 million to
US$350 million of cash flow from operations through the end of
2014, and US$1.2 billion of availability under committed lines of
credit, PacDrilling has sufficient liquidity to meet its progress
payments for the drillships under construction. The most
restrictive set of covenants is found in the US$1 billion senior
secured credit facility that will be used to finance the
construction of PacDrilling's sixth and seventh drillships that
are scheduled for delivery in the fourth quarter of 2013 and the
second quarter of 2014. This credit facility requires PacDrilling
to maintain leverage below 5.5x beginning at the end of 2013,
dropping to 5.0x in mid-2014. Moody's projects that the company
will comply with these covenants, however Moody's cannot rule out
the need to seek covenant relief if there is a delay in the
delivery in any of the rigs under construction. Alternate
liquidity sources are limited as all of the drillships are
mortgaged.

PacDrilling's rating could be upgraded upon the timely
contracting and mobilization of the three newbuild drillships
under construction, and if Moody's continues to expect that debt
to EBITDA will fall below 5.5x by the end of 2014. PacDrilling's
outlook could be stabilized or the rating could be downgraded if
there is a material delay in delivery of the three drillships
under construction. In addition, extended downtime for any of the
four operating drillships could lead to a downgrade. These
ratings triggers would also apply to the rating of PacDrilling
V's debt as the lack of diversification at PacDrilling V
translates into increased reliance on the unsecured guarantee
from the parent organization. In addition, protracted operational
issues with PacDrilling V's drillship could result in a downgrade
of PacDrilling V's rating.

The principal methodology used in rating PacDrilling was the
Global Oilfield Services Rating Methodology published in December
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Pacific Drilling S.A., a Luxembourg based company, is a provider
of deepwater drilling services to the oil and gas industry. Its
fleet consists of four operating drillships, all constructed
since October 2010, along with four drillships in various stages
of construction. Pacific Drilling V Ltd. is a wholly owned
subsidiary of PacDrilling with one drillship under construction,
which is scheduled for delivery in the second quarter of 2013.
Pacific Drilling is majority owned and controlled by the Quantum
Pacific Group, an investment holdings group with investments in
fertilizers and specialty chemicals, energy, shipping and
transportation.



=====================
N E T H E R L A N D S
=====================


CLONDALKIN INDUSTRIES: Moody's Affirms 'B3' CFR; Outlook Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
of Clondalkin Industries B.V. and upgraded the group's
probability of default rating to B3-PD from Caa1-PD.

Subsequently, the rating agency has assigned a provisional (P)B2
rating to the proposed $350 million 1st lien term loan and a
provisional (P)Caa2 rating to the proposed $105 million 2nd lien
term loan to be issued by Clondalkin Acquisition B.V. The outlook
on the ratings has been changed to positive from negative.

The rating action is based on Moody's assumption of a successful
placement of the proposed term loans. Failure in doing so would
result in significant downgrade pressure on Clondalkin's ratings
due to the then unsolved refinancing of upcoming debt maturities.

Moody's issues provisional ratings in advance of the final sale
of securities and these ratings reflect Moody's preliminary
credit opinion regarding the transaction only. Upon a conclusive
review of the final documentation, Moody's will endeavor to
assign a definitive rating to the notes. A definitive rating may
differ from the provisional rating.

Ratings Rationale:

"The affirmation of Clondalkin's CFR of B3 reflects the group's
implementation of adjustments to its financing structure, which,
should the proposed term loans be successfully placed, removes
significant refinancing risk," says Anke Rindermann, Moody's lead
analyst for Clondalkin. At the same time, Moody's notes that pro
forma for the refinancing, leverage will remain elevated at above
6x Debt/EBITDA as adjusted by Moody's, including the new
securitization facility. The upgrade of the Probability of
Default rating by one notch to B3-PD from Caa1-PD acknowledges
that the company has significantly reduced default risk if the
refinancing is implemented as currently proposed.

More fundamentally, the rating recognizes Clondalkin's solid
business profile, especially its diversified product portfolio
with an increasing focus on higher margin specialty products.
While recent disposals have reduced Clondalkin's scale and
diversification, it allows the group to focus on its higher
margin, less commoditized secondary pharma packaging business. At
the same time, Moody's cautions that volatile input costs will
remain a potential risk factor for Clondalkin, considering that
the group can pass on higher costs only with a time lag of
several months.

The positive outlook reflects Moody's expectation of gradually
improving credit metrics on the back of lower restructuring
charges which should allow Clondalkin to improve its EBITDA
margin to around 10%, and continued positive though moderate free
cash flow generation, both of which should help reducing its
leverage to around or below 6x over the next 12 months.

Following the proposed refinancing, Moody's anticipates that
Clondalkin's liquidity profile will be solid. Internal sources
include cash on hand of EUR32 million pro forma for the
refinancing. In addition, Moody's notes that Clondalkin will have
access to a new revolving credit facility amounting to $35
million as well as to a new EUR70 million multi-year
securitization agreement.

These sources should be sufficient to fund working cash
requirements, estimated at around 3% of sales, as well as capex
forecasted at around EUR25 million per year, with the RCF in
place to support seasonal working capital swings. Moody's expects
Clondalkin to continue to generate positive, albeit modest
amounts of free cash flows. The rating is based on Moody's
expectation of Clondalkin retaining solid headroom under its
financial covenant.

Upwards pressure could build should Clondalkin manage to
materially reduce leverage to clearly below 6 times on a
sustainable basis on the back of improvements in operating
profitability. Furthermore, the rating could enjoy upwards
pressure were Clondalkin to improve free cash flow generation
towards 5% of total debt and interest cover towards 1.5 times.

The rating could be downgraded should Clondalkin's profitability
deteriorate materially, such as for example on the back of higher
input costs that the group might not be able to recover.
Quantitatively, Moody's would consider downgrading Clondalkin's
rating if its EBITDA margin were to decline below the high single
digit percentages, with its leverage increasing to materially
above 7x Debt/EBITDA. Also, a weakening liquidity profile
including incurrence of materially negative free cash flow would
put pressure on the rating.

The (P)B2 rating for the first lien term loan due 2020is one
notch above the B3 CFR and reflects the preferential ranking of
the loan in the overall debt structure with no priority debt
ranking ahead and a security package that encompasses upstream
guarantees from all material operating companies and an
essentially all asset pledge, shared equally with lenders under
revolving credit facility. The (P)Caa2 rating of the second lien
term loan due 2020 is two notches below the group rating,
reflecting the sizeable amount of secured debt and structurally
preferred obligations ranking ahead of the second lien facility.

The principal methodology used in these ratings was the Global
Packaging Manufacturers: Metal, Glass, and Plastic Containers
published in June 2009. Other methodologies used include Loss
Given Default for Speculative-Grade Non-Financial Companies in
the U.S., Canada and EMEA published in June 2009.

Clondalkin is among the leading converters for a number of niche
packaging products. In the last twelve months ending March 2013,
the company recorded sales of EUR695 million (pro forma for
disposals), which were generated in Europe (69%), North America
(27%) and other countries (4%). Clondalkin Industries B.V., which
is owned by Warburg Pincus Funds and management, is domiciled in
Amsterdam, Netherlands.



===========
P O L A N D
===========


CENTRAL EUROPEAN: Gets Final OK to Hire Ernst & Young as Auditors
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware Central
authorized, on a final basis, European Distribution Corporation,
et al., to employ Ernst & Young Audit sp. z o.o. as auditors.

As reported in the Troubled Company Reporter on April 9, 2013,
the Debtors have employed EY Poland as their auditor since
March 29, 2011.  Postpetition, EY Poland will provide audit
services as EY Poland and the Debtors will deem appropriate and
necessary in the course of the chapter 11 cases, including:

   (a) audit and report on the Debtors' consolidated financial
       statements for the year ended December 31, 2012 and audit
       its internal control over financial reporting; and

   (b) audit and report on the effectiveness of the Debtors'
       internal control over financial reporting as of
       December 31, 2012.

EY Poland's fees for services performed under the Engagement
Letter are charged on an hourly-rate basis:

   Title                                   Rate
   -----                                   ----
   Partner                             US$1,150
   Senior Manager (Capital Markets)      $1,000
   Senior Manager (Audit)                  $560
   Manager                                 $520
   Senior                                  $290
   Assistant                               $150

EY Poland discloses it has retained the law firm Latham & Watkins
LLP in connection with its retention and fee applications in the
Chapter 11 cases, and that EY Poland will request reimbursement
of Latham's fees and expenses from the Debtors' estates.

To the best of the Debtors' knowledge, EY Poland is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

                            About CEDC

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker.  Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.


CENTRAL EUROPEAN: Has Until June 20 to File Schedules, Statements
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
until June 20, 2013, the deadline for Central European
Distribution Corporation, et al. to file their schedules of
assets and liabilities and statements of financial affairs.

Mt. Laurel, New Jersey-based Central European Distribution
Corporation is one of the world's largest vodka producers and
Central and Eastern Europe's largest integrated spirit beverages
business with its primary operations in Poland, Russia and
Hungary.

On April 7, 2013, CEDC and two subsidiaries sought bankruptcy
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan
that reduces debt by US$665.2 million.

Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as
legal counsel to the Debtor.  Houlihan Lokey is the investment
banker.  Alvarez & Marsal will provide the chief restructuring
officer. GCG Inc. is the claims and notice agent.



=============
R O M A N I A
=============


OLTCHIM: To Lay Off Around 900 Employees Beginning Next Week
------------------------------------------------------------
Romania-Insider.com reports that around 900 employees in Oltchim
will be laid off starting next week, 600 of whom will be from the
main company in Ramnicu Valcea, and 300 from a subsidiary near
Pitesti.

According to Romania-Insider.com, Gheorghe Piperea,
representative of the judiciary administrator said that the
number of people who need to be laid off is a maximum of 1,050,
and was established based on the minimum amount that needs to be
saved on salary costs, which is of EUR1 million a month.

Those who will be laid off will receive compensation packages,
Romania-Insider.com discloses.  Oltchim has over 3,300 employees,
Romania-Insider.com notes.

The chemical producer is due for privatization in September-
October, and, according to the judiciary administrator, it would
be preferable for the company to be bought together with the
petrochemical platform near Pitesti, Romania-Insider.com
discloses.  Oltchim, Romania-Insider.com says, will divide into
two companies, with a first set to take over the debt of the
chemical provider, and the second will start activity from
scratch.

"Debt will be partially canceled in a process called a haircut,
within a reorganization plan which focuses on the payment plan.
I can say that in large file, the recovery rate is between 25 and
30 percent," Romania-Insider.com quotes Gheorghe Piperea as
saying.  The current level of debt is EUR793 million for Oltchim,
Romania-Insider notes.

Mr. Piperea, as cited by Romania-Insider.com, said that a
pre-condition to future buyers will be ensuring capital to bring
production capacity to 65 percent, which means about EUR50
million, and a second condition will be bringing management to
the new unit, which will take over functional assets from the
"old" Oltchim.

Several investors have shown interest in Oltchim, such as Ineos
Kerling and Fortissimo Capital, among others, Romania-Insider.com
says.

Oltchim is currently functional at only 27% of its capacity, and
the company has been under insolvency procedures since January
2013, Romania-Insider.com notes.

Oltchim is a Romanian chemical producer.



===========
R U S S I A
===========


BASHNEFT JSC: Fitch 'BB' Affirms Issuer Default Ratings
-------------------------------------------------------
Fitch Ratings has affirmed Russia's Joint Stock Oil Company
Bashneft Long-term foreign and local currency Issuer Default
Ratings (IDR) at 'BB'. The Outlooks have been revised to Positive
from Stable.

The Positive Outlook reflects our expectation that over the
medium term the company will maintain stable brownfield
production levels and strong credit metrics for a 'BB' rated
company, ie, funds from operations (FFO) gross leverage below 2x
and FFO interest coverage of above 8x. It also reflects that its
Trebs and Titov (T&T) greenfield project is on track to produce
its first oil later this year. Bashneft is a second-tier Russian
integrated oil company with 2012 upstream production of 308
thousand barrels of oil equivalent per day (mbbl/d) and refinery
throughput of 415mbbl/d.

KEY RATING DRIVERS

Stable Brownfields Production:

In 2012, Bashneft's crude production was up 2% yoy to 308 mbbl/d,
which contrasts well with that of some other Russian oil
companies such as OAO LUKOIL (BBB-/Stable) that reported a 1%
decline in hydrocarbon production in that year. We recognize
Bashneft's efforts in increasing its brownfield production but
believe that the company has limited headroom to further increase
oil output in Bashkiria, its historical stronghold.

T&T Improves Upstream Profile:

Bringing the T&T oilfields on-stream, in a joint venture (JV)
with LUKOIL, which has a 25% stake, is important for improving
Bashneft's upstream profile and bringing it up to match its
historically more sizable downstream operations. The company
expects the JV to produce its first oil in H213 and to achieve
peak production of as much as 95mbbl/d by 2018-2019. However, the
free cash flow generated by the JV may not be fully available to
service Bashneft's debt as Bashneft will have to coordinate the
JV's dividend and capex policy with LUKOIL.

Competitive Reserves and Costs:

Bashneft's proved oil reserves of 2,007 million barrels of oil at
end-2012 imply an 18-year reserve life, in line with that of
Russian peers. In 2012, its production costs were manageable at
USD6.6/bbl, below that of most international peers but above that
of the Russian majors, due to smaller, more mature oilfields
compared with those of OJSC OC Rosneft (BBB/RWN) or LUKOIL. Fitch
expects that Bashneft's operational metrics will remain sound in
the medium term.

Strong Downstream and Retail:

Bashneft is the fourth-largest refiner in Russia; its three
refineries have 480mbbl/d total primary capacity and Nelson index
of 8.55. In 2012, refining and marketing contributed around 30%
to the company's EBITDA (based on IFRS accounts). The company's
EBITDA to barrel of oil produced of USD28/bbl in 2012 is one of
the highest among Russian peers, partially due to downstream
being significantly higher than upstream in size -- by 34% by
volume in 2012, unlike most other Russian majors. Planned further
upgrades of its refineries should improve Bashneft's refining
complexity, increase light product yield and help it maintain
solid refining margins.

Conservative Leverage to Remain:

At end-2012 Bashneft's FFO net adjusted leverage was 1.3x, up
from 1.0x in 2011, and its FFO coverage improved to 8.4x in 2012
from 6.4x in 2011. Based on the agency's Brent price deck of
USD100/bbl in 2013, USD92/bbl in 2014 and USD85/bbl in 2015, we
expect that Bashneft's gross leverage will remain below 2x in
2013-2016 and its coverage be above 8.0x.

Standalone Uncapped Ratings:

Fitch rates Bashneft on a standalone basis, and assesses its
linkage with Sistema Joint Stock Financial Corp (Sistema; 'BB-
'/Stable), its majority shareholder as moderate. We note that
Bashneft remains a key asset for Sistema along with OJSC Mobile
TeleSystems (MTS, BB+/Stable). In 2012, Bashneft contributed
around 35% to Sistema's EBITDA, and Sistema's ability to service
its debt may depend on dividends it receives from Bashneft.

Bashneft has material related party transactions, eg during 2012
it made a number of deposits with a total amount of RUB24.8
billion of cash (or 7.5% of its net revenue) with the Sistema-
owned OJSC MTS Bank (B+/Stable). However, by the end of the year
most of these funds had been repaid, and Bashneft's debit balance
with the bank was RUB5.1 billion. While Fitch does not currently
constrain Bashneft's ratings (which can be the case if related
party transactions intensify and lead to material cash outflow),
Bashneft cannot be rated more than two notches higher than
Sistema under the agency's criteria.

RATING SENSITIVITIES

Positive: Successful production launch and development at T&T in
2013-2015 coupled with solid operational and credit metrics, eg,
stable brownfield production and refining volumes and FFO gross
adjusted leverage below 2.5x and FFO interest cover above 8x on a
sustained basis, may lead to a positive rating action.

Negative: Bashneft's failure to maintain crude production or
sustained deterioration of its credit metrics, including FFO
gross adjusted leverage above 2.5x and FFO interest cover below
8x on a sustained basis owing to higher capex and dividends may
lead to a negative rating action.

LIQUIDITY AND DEBT STRUCTURE

Acceptable Liquidity

At end-2012, Bashneft had cash of RUB20.1 billion and RUB33
billion in committed credit facilities, which covered its short-
term debt of RUB32 billion. In February 2013, Bashneft issued
RUB30bn 10-year bonds (with a half having a put option in 2018
and another half in 2020) and repaid most of the debt falling due
in 2013. Fitch believes that Bashneft has good access to the
domestic capital markets and would refinance its upcoming
maturities if needed.

Balanced Debt Portfolio

At end-2012, Bashneft's balance sheet debt of RUB110.2 billion
was made up of bank loans (RUB77.4 billion), domestic bonds
(RUB25.2 billion) and pre-export finance facilities (RUB7.6
billion). As most of its borrowings are RUB-denominated, its
effective interest rate remained relatively high at 8.4%. This
may reduce as Bashneft intends to increase the share of USD-
denominated borrowings in its portfolio.

LIST OF RATING ACTIONS

  Long-Term IDR: affirmed at 'BB', Outlook revised to Positive
  from Stable

  Short-Term IDR: affirmed at 'B'

  Local currency Long-Term IDR: affirmed at 'BB', Outlook revised
  to Positive from Stable

  Local currency Short-Term IDR: affirmed at 'B'

  National Long-Term Rating: affirmed at 'AA-(rus)', Outlook
  revised to Positive from Stable

  Senior unsecured rating: affirmed at 'BB'


FAR-EASTERN SHIPPING: S&P Assigns 'BB-' CCR; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it assigned its 'BB-
' long-term corporate credit rating to Russian integrated
logistics, rail, and port operator Far-Eastern Shipping Co. PLC
(FESCO).  The outlook is stable.

At the same time, S&P assigned its 'BB-' issue rating to the $500
senior secured notes (due in 2018) and to the $300 senior secured
notes (due in 2020) issued by Far East Capital Ltd. S.A., a
fully-owned subsidiary of FESCO.  The recovery rating on the
notes is '4', indicating S&P's expectation of average (30%-50%)
recovery in the event of a payment default.

The ratings reflect S&P's assessment of FESCO's business risk
profile as "fair" and its financial risk profile as "aggressive."

Specifically, the ratings reflect S&P's view that FESCO is
exposed to revenue volatility inherent to the freight
transportation industry, which is closely linked to the
volatility of the commodity-dependent Russian economy.  The
ratings also reflect some uncertainty connected with the
liberalization of the rail transportation market, which S&P
believes could lead to an increase in competition in the medium
term.

The ratings derive support from FESCO's strong position in Russia
as an integrated rail, port, and logistics operator providing
services along the transportation chain.  Additional strengths
include the company's revenue diversification--the result of its
various businesses and large customer base--and its track record
of organic growth.

Under S&P's base-case operating scenario for 2013, it anticipates
11%-13% revenue growth, mainly attributable to growing container
volumes and tariff increases in the port segment, which will
offset a likely decline in fleet revenues in the rail business.
S&P forecasts that FESCO's EBITDA margin will improve to about
21% in 2013, as the company benefits from the larger contribution
of the higher-margin port segment following its acquisition of
the Commercial Port of Vladivostok in March 2012 and from the
positive effects of operational restructuring.

S&P estimates that FESCO's Standard & Poor's-adjusted debt to
EBITDA will be about 3.8x in 2013, down from about 4.2x in 2012,
before gradually declining from the end of 2013.  This ratio is
based on S&P's estimation of adjusted debt of about $1.1 billion
at the end of 2013, pro forma the refinancing.  S&P adjusts the
debt to include a $140 million nonrecourse debt instrument
borrowed outside the restricted group that S&P considers as a
debt-like obligation under its criteria.  S&P considers adjusted
debt to EBITDA of less than 4x as commensurate with the current
rating on FESCO.

Under S&P's base-case rating scenario for 2013, it anticipates
that FESCO's free cash flow generation will slightly exceed its
scheduled debt amortization.  S&P's forecasts capture significant
growth-related investments in its existing activities.  S&P
assumes that the company will not distribute dividends in 2013,
according to its stated policy.

The stable outlook reflects S&P's view that FESCO will gradually
deleverage in the short to medium term, based on its forecast of
growth in the port business and the benefits of operational
restructuring over the next 12 months.  S&P also believes that
the company's operating resilience will enable it to maintain an
adequate liquidity position under its criteria.

S&P could lower the ratings if the company's earnings growth is
less than it forecasts, leading to debt to EBITDA of more than 4x
by year-end 2013.

S&P views the likelihood of a positive rating action as unlikely
in the next year because of the rate at which S&P believes the
company will deleverage.


NORD GOLD: Fitch Assigns Sr. Unsec. 'BB-' Rating to $500MM Notes
----------------------------------------------------------------
Fitch Ratings has assigned Nord Gold N.V's US$500 million issue
of 6.375% notes due May 2018 a final senior unsecured 'BB-'
rating.

The rating action follows a review of the final documentation
materially conforming to the draft documentation reviewed when
Fitch assigned an expected 'BB-(EXP)' rating on April 23, 2013.

Nord Gold is a medium-sized gold producer with mining operations
in Russia, Guinea, Burkina Faso and Kazakhstan. The company was
spun-off from OAO Severstal (BB/Stable) in 2012.

KEY RATING DRIVERS

Guaranteed Notes

The notes are unconditionally and irrevocably guaranteed by
Societe Miniere de Dinguiraye (Guinea), JSC FIC Alel
(Kazakhstan), Neryngri-Metallic LLC (Russia), and CJSC Mine
Aprelkovo (Russia), operating companies of the group, and by High
River Gold Mines Limited (Canada), a holding company that owns
the group's operating companies in Russia and Burkina Faso.

Acceptable Mine Life and Reserve Quality

At January 1, 2013, the company had control of 12.6moz of gold
reserves with an average mine life of approximately 18 years
based on output of 717koz of gold in 2012. This places Nord Gold
as a small-to medium sized mining company in global terms. The
quality of ore reserves at Nord Gold's deposits at an average
gold grade of 1.1g/t according to the latest available JORC
report, is close to the upper end of international peers, which
average 0.8g/t -1.2g/t.

Well-diversified Portfolio of Assets

The company's gold reserves are well diversified geographically
and by number of mines. In 2012, the company operated eight
mines; the company's largest mine, Lefa, provided less than 24%
of the total company's gold output. The launch of the Bissa mine
in Burkina Faso in January 2013 further enhanced the company's
operational diversification. While Nord Gold does not have an
excessice exposure to any of the four countries in which it
operates (Russia, Burkina Faso, Guinea and Kazakhstan), each of
these jurisdictions is viewed by Fitch as having higher country
risk relative to mining operations.

Increasing Cash Costs

The company's increasing cash costs -- which rose 22% to
USD836/oz in 2012 -- present risks as they are higher than the
global average. However, the agency expects an improvement in the
company's cost position in 2013 due to the implementation of a
cost-saving program with targeted savings of more than USD83m
(13% of the company's cost of goods sold excluding depreciation
and amortization in 2012), and the launch of the lower-cost Bissa
mine.

Limited Track Record of Organic Growth

Fitch positively views the company's change of focus from
acquisitive growth to an organic growth strategy. Given that 25%
of Nord Gold's resources are at a development/exploration stage
Fitch views that the company will be able to keep output stable
in the medium term. However, the company has a comparatively
limited track record of new project development with Bissa the
only new mine that has been launched.

DEBT AND LIQUIDITY

Moderate Leverage

Fitch expects neutral free cash flow (FCF) in 2013 and negative
FCF in 2014-2015 due to high project development costs. This is
expected to see leverage increase with funds from operations
(FFO) adjusted gross leverage rising to 1.8x by end-2013 and 2.0-
2.2x during 2014-2015 (FYE12: 1.4x).

Strong Liquidity

The liquidity position of the company at end-2012 was strong with
US$45 million of cash and US$430 million of unutilized committed
bank loans compared with US$262 million of short-term borrowings.
The issued notes will allow refinancing of short-term borrowings,
which will further strengthen the company's liquidity position.

RATING SENSITIVITIES

Positive: Future developments that could lead to positive rating
actions include:

  -- FFO adjusted gross leverage falling sustainably below 1.5x

  -- EBITDAR margin rising above 30% on average through the
     commodity price cycle (32.8% in 2012)

Negative: Future developments that could lead to negative rating
action include:

  -- FFO adjusted gross leverage rising sustainably above 3.0x

  -- EBITDAR margin falling sustainably below 20%

FULL LIST OF RATINGS

  Long-Term foreign currency Issuer Default Rating (IDR): 'BB-';
  Outlook Stable

  Short-Term foreign currency IDR: 'B'

  Foreign currency senior unsecured rating: 'BB-'

  Long-term local currency IDR: 'BB-'; Outlook Stable

  Senior unsecured rating to US$500 million 6.375% 2018 notes:
  assigned at 'BB-'



=========
S P A I N
=========


BANCO POPULAR 1: S&P Lowers Rating on Class D Notes to 'BB-'
------------------------------------------------------------
Standard & Poor's Ratings Services took various credit rating
actions on IM GRUPO BANCO POPULAR EMPRESAS 1, Fondo de
Titulizacion de Activos' outstanding EUR297.2 million notes.

Specifically, S&P has:

   -- Lowered to 'A+ (sf)' from 'AA- (sf)' its rating on the
      class B notes, to 'A- (sf)' from 'A (sf)' its rating on the
      class C notes, and to 'BB- (sf)' from 'BB (sf)' its rating
      on the class D notes; and

   -- Affirmed its 'AA- (sf)' rating on the class A2 notes and
      its 'D (sf)' rating on the class E notes

The rating actions follow S&P's assessment of the transaction's
performance using the latest available trustee report (dated
March 2013) and portfolio data from the servicer, as well as the
application of S&P's updated criteria for European collateralized
loan obligations (CLOs) backed by small and midsize enterprises
(SMEs) and S&P's 2012 counterparty criteria.

                          CREDIT ANALYSIS

Based on S&P's review of the current pool and since its previous
review in July 2011, the pool has experienced further defaults
and the obligor concentration risk has further increased due to
the further deleveraging of loans.

The underlying pool is highly seasoned with a pool factor (the
percentage of the pool's outstanding aggregate principal balance
in comparison with the closing date) of approximately 14.3%.

S&P has applied its updated European SME CLO criteria to
determine the scenario default rates (SDRs) for this transaction.

S&P categorizes the originator as moderate (based on tables 1, 2,
and 3 in S&P's criteria), which factored in Spain's Banking
Industry Country Risk Assessment (BICRA) of 6 (as the country of
origin for these SME loans is Spain).  This resulted in a
downward adjustment of one notch to the 'b+' archetypical
European SME average credit quality assessment to determine loan-
level rating inputs and applying the 'AAA' targeted corporate
portfolio default rates.  As a result, S&P's average credit
quality assessment of the current pool is 'b'.

S&P further applied a portfolio selection adjustment of minus
three notches to the 'b' credit quality assessment, which S&P
based on its review of the current pool characteristics, compared
with the originator's other transactions.  As a result, S&P's
average credit quality assessment of the pool to derive the 'AAA'
SDR was 'ccc'.

S&P has applied this approach as it was not provided with the
internal credit scores upon request, therefore S&P assumed that
each loan in the portfolio had a credit quality that is equal to
its average credit quality assessment of the portfolio.

S&P has assessed Spain's current market trends and developments,
macroeconomic factors, and the way these factors are likely to
affect the loan portfolio's creditworthiness.

As a result of this analysis, S&P's 'B' SDR is 11.0%.

The SDRs for rating levels between 'B' and 'AAA' are interpolated
in accordance with S&P's European SME CLO criteria.

                           COUNTRY RISK

Given that S&P's long-term rating on the Kingdom of Spain is
'BBB-', according to its nonsovereign ratings criteria, S&P has
affirmed its 'AA- (sf)' rating on the class A2 notes.

                      RECOVERY RATE ANALYSIS

At each liability rating level, S&P assumed a weighted-average
recovery rate (WARR) by taking into consideration the asset type
(secured/unsecured) and the country recovery grouping and
observed historical recoveries.  S&P also factored in the actual
recoveries from the historical defaulted assets to derive its
recovery rate assumptions to be applied in its cash flow
analysis.

As a result of this analysis, S&P's WARR assumption in a 'AA'
scenario was 29.99%.  The recovery rates at more junior rating
levels were higher (as outlined in S&P's criteria).

                         CASH FLOW ANALYSIS

S&P subjected the capital structure to various cash flow
scenarios, incorporating different default patterns, recovery
timings, and interest rate curves to generate the minimum break-
even default rate (BDR) for each rated tranche in the capital
structure.  The BDR is the maximum level of gross defaults that a
tranche can withstand and still fully repay the noteholders,
given the assets' and structure's characteristics.  S&P then
compared these BDRs with the SDRs outlined above.

                         COUNTERPARTY RISK

The transaction features an interest rate swap.  JP Morgan Chase
Bank N.A. (A+/Negative/A-1) is the swap counterparty.  Under
S&P's 2012 counterparty criteria, it has defined it as a
"derivative" counterparty.  S&P has reviewed the swap
counterparty's downgrade provisions, and, in its opinion, they do
not fully comply with S&P's 2012 counterparty criteria.
Therefore, S&P conducted its cash flow analysis without giving
benefit to the swap above a 'AA-' rating level--its long-term
issuer credit rating on the swap counterparty plus one notch.

The credit enhancement available to the class B, C, and D notes
is commensurate with lower ratings than previously assigned.  S&P
has therefore lowered to 'A+ (sf)' from 'AA- (sf)' its rating on
the class B notes, to 'A- (sf)' from 'A (sf)' its rating on the
class C notes, and to 'BB- (sf)' from 'BB (sf)' its rating on the
class D notes.

S&P's rating on the class E notes reflects the timely payment of
interest.  S&P lowered its rating on this class of notes to 'D
(sf)' on July 29, 2009, as it deferred interest payments.  As the
class E notes are still deferring interest, S&P has affirmed its
'D (sf)' rating on the class E notes.

IM GRUPO BANCO POPULAR EMPRESAS 1 is a cash flow CLO transaction
that securitizes loans to SMEs.  The collateral pool comprises
both secured and unsecured loans.  The transaction closed in
September 2006.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.  The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class              Rating
            To                From

IM GRUPO BANCO POPULAR EMPRESAS 1, Fondo de Titulizacion de
Activos
EUR1.832 Billion Floating-Rate Notes

Ratings Lowered

B           A+ (sf)           AA- (sf)
C           A- (sf)           A (sf)
D           BB- (sf)          BB (sf)

Ratings Affirmed

A2          AA- (sf)
E           D (sf)


* SPAIN: 2,800 Spanish Firms & Families Declare Bankruptcy in Q1
----------------------------------------------------------------
Xinhua News Agency reports that Spanish National Institute of
Statistics on Wednesday revealed more than 2,800 Spanish firms
and families declared bankruptcy in the first quarter of 2013.

The number is 22.8% higher than that of the same period in 2012
and 10.4% higher than the previous three months, Xinhua
discloses.

According to Xinhua, some 25% of the firms declaring bankruptcy
were in the construction sector which has been badly hit by an
economic crisis over the last five years.

About 17.1% of the insolvent firms were involved in commercial
activities while 16.3% were active within the industrial sector,
Xinhua notes.


* SPAIN: League President Mulls Debt Reduction for Ailing Clubs
---------------------------------------------------------------
Anna Edgerton and Bob Bensch at Bloomberg News report that it was
a rough time for Javier Tebas to take over as president of the
Spanish Professional Soccer League.

Real Madrid and Barcelona lost to German rivals in the Champions
League semifinals last week, fueling speculation that Spanish
dominance of global soccer is slipping, Bloomberg recounts.

According to Bloomberg, behind the disappointing performance of
Spain's two star teams is a league whose clubs carried a combined
EUR752 million (US$985 million) of debt last year.  With the
country's economy mired in recession, fewer Spaniards can afford
the higher ticket prices and more expensive broadcast rates that
Tebas attributed to a value-added tax, which last year rose to
21% from 18%, Bloomberg says.

Mr. Tebas, as cited by Bloomberg, said the economic plan,
especially for smaller teams overshadowed by Real Madrid and
Barcelona, is to reduce debt and interest payments so that clubs
can invest in talent on the field.

In November, Spain's tax agency confiscated income from several
soccer clubs as it chased almost US$1 billion of debts from teams
in the country's top two divisions, Bloomberg recounts.  A tax
agency official said at the time it recouped EUR132.9 million of
debt from teams since the start of 2012, Bloomberg relates.

                          Debt Reduction

In April 2012, the European Commission said it was examining
whether Spanish clubs are improperly receiving state aid under
agreements that delay tax payments, Bloomberg discloses.  Chief
Executive Officer Miguel Angel Gil said in an interview at the
time that Atletico Madrid is paying EUR15 million a year of a
EUR115 million tax debt, Bloomberg notes.

Mr. Tebas said the league hasn't received any government
assistance in two seasons and that teams have reduced their debt
by almost 10%, Bloomberg relates.



=====================
S W I T Z E R L A N D
=====================


BARRY CALLEBAUT: Moody's Cuts Long-Term Issuer Rating to 'Ba1'
--------------------------------------------------------------
Moody's Investors Service downgraded the long-term issuer rating
of Barry Callebaut AG to Ba1 from Baa3. At the same time, Moody's
has converted the rating into a corporate family rating (CFR) and
probability of default rating (PDR), in line with the rating
agency's practice for issuers that have migrated into speculative
grade.

Concurrently, Moody's has downgraded to Ba1, with a loss given
default (LGD) assessment of LGD4, from Baa3 the ratings of the
combined EUR600 million of senior unsecured notes issued by Barry
Callebaut's fully owned and guaranteed subsidiary Barry Callebaut
Services NV. The outlook assigned to the ratings is stable.

This action follows Barry Callebaut's announcement that it has
entered into a definitive agreement to acquire the Cocoa
Ingredients Division of Petra Foods Ltd. (Petra) for a total
consideration of US$950 million (approximately CHF882/EUR720
million) on a cash/debt-free basis. Petra shareholders approved
the transaction on April 30. To finance the transaction Barry
Callebaut is seeking to raise a combination of US$600 million of
bond debt and US$300 million of common equity in advance of
closing. Albeit the acquisition financing is backstopped by a
bridge loan from banks. The company will also utilize $50 million
of existing local debt. The transaction remains subject to
approval by regulatory authorities and closing is expected in
summer 2013.

Ratings Rationale:

"The downgrade largely reflects the negative impact of the Petra
transaction on Barry Callebaut's key credit metrics and financial
flexibility, given the acquisition is financed predominantly with
debt," says Andreas Rands, a Moody's Vice President - Senior
Analyst and lead analyst for Barry Callebaut. "The downgrade also
reflects our expectation that, going forward, Barry Callebaut's
financial profile will be less conservative than it has been
historically," explains Mr. Rands. "This view is based on Barry
Callebaut's recent heightened level of acquisition and investment
activity, which indicates that, going forward, the company will
be more willing to increase its financial leverage and be
financially aggressive than was incorporated in the previous
ratings."

Whilst the acquisition will not close until summer 2013, Moody's
expects it to result in Barry Callebaut's financial leverage
(debt/EBITDA, as adjusted by Moody's) remaining above 3.5x by
financial year (FY) 2014 (ended August 31), up from 2.9x in
FY2012. In addition, Moody's expects the company's retained cash
flow (RCF)/net debt to weaken in to the mid-to-high teens in
percentage terms and not return to the low 20s until FY2016/17.
The increase in leverage is a result of the US$600 million
(approximately CHF558/EUR455 million) of new debt to refinance
the Petra transaction, with the balance to be funded with $300
million of common equity and US$50 million of existing local
debt. Although Barry Callebaut intends to improve its financial
leverage over the next few years to be consistent with
investment-grade levels, Moody's considers this a challenging
task. Moody's expects the company's financial leverage to exceed
3.0x until FY2016/17, assuming Petra is successfully integrated
as planned. The rating agency notes the additional integration
risk associated with the transaction given that Petra is
currently underperforming and significantly loss-making at the
net profit level in FY2012 (US$28.6 million loss relative to
US$21.2 million profit in FY2011). Moody's also notes comments by
Petra in their Annual Report 2012 that significant investment in
the Cocoa Ingredients Division is required to support future
organic growth. They also expect the division to remain loss-
making in FY2013.

Moody's further notes that the deleveraging task facing Barry
Callebaut comes on top of more than CHF105 million (EUR85
million) of investments by the company since H2 FY2012, including
(1) the CHF33 million (EUR27 million) acquisition of ASM Foods AB
in Sweden in January 2013; (2) outsourcing contract wins with
Arcor-Dos en Uno and Morinaga, which had a combined investment
requirement of CHF31.5 million (EUR26.2 million); and (3) CHF41.8
million (EUR34.5 million) of capacity investments in Turkey and
North America. These are in addition to other investments made
during H1 FY2012 and are in the context of CHF212 million of RCF
generated by the company in FY2012. Barry Callebaut has been free
cash flow negative (within the range CHF23-137 million) in five
of the seven previous financial years, on the back of its
capital-intensive business model. Management is likely to be
pressured in successfully delivering on all recent investments,
absent the Petra acquisition.

Offsetting some of these concerns are the added diversity and
opportunities the acquisition provides for Barry Callebaut.
Moody's recognizes that the acquisition of Petra's Cocoa
Ingredients Division will (1) make Barry Callebaut the largest
global cocoa processor, in terms of sales volume; (2) augment
Barry Callebaut's existing production of semi-finished chocolate
products; (3) secure an alternative source of cocoa supply, as
well as capacity for recent and prospective outsourcing contract
wins; and (4) increase the company's presence in cocoa powders
and in emerging markets, where chocolate market growth rates are
highest.

Barry Callebaut has a solid business profile, a result of (1) the
company's established leading position in the key global
chocolate markets; (2) the traction it has gained in emerging
markets; and (3) it benefiting from a largely cost-plus business
model. An additional positive consideration is Barry Callebaut's
good liquidity profile, with debt maturities for existing
financial liabilities well spread and no significant refinancing
needs over the next 12-18 months (other than the bridge loan for
the Petra transaction). However, in addition to an increase in
financial leverage, the Petra transaction weakens the company's
business profile, albeit not materially, as a result of
anticipated lower EBITDA margins (pre-synergies) and increased
goodwill.

Ba1 CFR

Barry Callebaut's Ba1 rating reflects the fact that recent
acquisitions, infrastructure investments and costs associated
with outsourcing contracts have weakened Barry Callebaut's key
credit metrics, which Moody's expects to remain in high-yield
territory for the foreseeable future. Further, the Petra
transaction -- which the company expects to complete in summer
2013 -- will test Barry Callebaut's ability to turn around the
financial performance of a large business. Barry Callebaut is
reliant on politically unstable countries such as Cote d'Ivoire
for the supply of cocoa beans. Whilst Moody's recognizes that the
political situation in Cote d'Ivoire has stabilized since the
turmoil in 2011, and that Barry Callebaut has begun diversifying
to countries with a more stable political environment such as
Malaysia and Indonesia (and Brazil through the Petra
acquisition), the company remains significantly exposed to
politically unstable countries. This adds to existing supply
disruption risks, although these are inherent to the industry.

However, more positively, the rating also reflects Barry
Callebaut's established presence in all major global markets, and
its focus on diversifying the current Europe-based revenues
towards new markets such as Brazil, Russia, India, China and
Mexico, which typically display higher growth prospects. Through
the Petra acquisition, Barry Callebaut will further expand its
operations in Singapore and Indonesia and gain new facilities in
Thailand. The company's rating also reflects the resilience of
its hedging policy to volatile cocoa bean prices. Barry
Callebaut's cost-plus business model, which covers around 80% of
its sales volumes, has proved successful in recent years and
enabled it to sustain fairly stable operating margins levels,
despite volatile cocoa bean prices. Moody's expects that Petra's
less successful cocoa hedging strategies will be replaced by
Barry Callebaut's.

Ba1 Senior Unsecured Instrument Ratings And Ba1-PD PDR

Barry Callebaut's Ba1 senior unsecured instrument ratings are in
line with the CFR. This reflects the lack of significant
structural subordination and that they are fully guaranteed by
Barry Callebaut AG. The company's probability of default (PDR)
rating of Ba1-PD reflects the use of a 50% family recovery rate,
consistent with a bank and bond capital structure.

Outlook

The stable outlook on the ratings reflects Barry Callebaut's
solid business profile and operating performance. It also
reflects Moody's expectation that the company's key credit
metrics will weaken over the next three to five financial years
if the Petra acquisition completes. Regardless of whether or not
the transaction closes, Moody's expects Barry Callebaut's metrics
to weaken over the next 12-18 months as a result of the company's
recent significant investment activity. To the extent that
deleveraging is delayed beyond the expected timeframe, the
company's ratings would likely experience downward pressure.

What Could Change The Rating Down/Up

Negative pressure could be exerted on the rating if Barry
Callebaut's credit metrics were to remain weak, with adjusted
RCF/net debt in the mid-teens in percentage terms and adjusted
leverage above 3.75x and, if the company failed to maintain its
adjusted EBITDA margins at high single-digit levels, or if
Moody's had renewed concerns with regard to supply risk.
Conversely, although not expected in the short term in view of
this action, positive rating pressure could develop if Barry
Callebaut were able to deliver improved credit metrics, with
adjusted RCF/net debt above 20%, adjusted leverage trending
towards 3.0x, and improve its adjusted EBITDA margins towards
double-digit levels, all on a sustainable basis and in
conjunction with increased diversification of raw materials
supply.

The principal methodology used in these ratings was the Global
Food - Protein and Agriculture Industry published in September
2009. Other methodologies used include Loss Given Default for
Speculative-Grade Non-Financial Companies in the U.S., Canada and
EMEA published in June 2009.

Headquartered in Zurich, Switzerland, and with reported annual
sales of CHF4.8 billion (approximately EUR4.0 billion) for
financial year (FY) 2011/12 (ended August 31), Barry Callebaut AG
is the world's leading supplier of premium cocoa and chocolate
products, servicing customers across the wide spectrum of the
global food industry.



===========================
U N I T E D   K I N G D O M
===========================


ECO-BAT TECH: Moody's Affirms 'Ba3' CFR; Outlook Negative
---------------------------------------------------------
Moody's Investors Service changed the outlook on Eco-Bat
Technologies Limited's ratings to negative from stable (Ba3 CFR).
The outlook change reflects Moody's view that, after a
challenging 2012, Eco-Bat's operating performance could remain
under significant pressure in 2013.

In addition, event risk from the large pay-in-kind (PIK) note at
Eco-Bat's parent increases as the PIK continues to accrue
interest. Concurrently, Moody's affirms the Ba3 corporate family
rating (CFR), Ba3-PD probability of default rating (PDR) and B1
rating for the 2017 senior notes issued by Eco-Bat Finance plc.

Ratings Rationale:

Eco-Bat's operating performance is under significant pressure.
After a strong operating performance in 2011, Eco-Bat experienced
a much more challenging environment in 2012 including a decline
in revenues by 6.5% and EBITDA by 38% on the back of reduced
average lead prices (-14%). Raw material costs, which mainly
refer to scrap batteries that are collected from recycling yards,
distributors or directly from customers, remained high due to a
very mild winter in early 2012 that led to reduced battery
failures but also a more structural trend of increasing scrap
prices relative to lead over recent years.

In addition, customers mainly comprise a limited number of
battery manufacturers, creating a high degree of customer
concentration for Eco-Bat, which pressures pricing power in a
competitive industry. Decisions taken by Johnson Controls, Inc.
(Baa1, stable), a large battery manufacturer and important
customer of Eco-Bat (at about 25% of 2012 revenues), to increase
in-house smelting capacity in the US at the expense of
independent smelters such as Eco-Bat is further elevating
competition. Legal disputes further highlight the challenging
relationship in the US between Eco-Bat and its largest customer.
The volume and price impact from Johnson Controls, Inc.'s. new
smelting capacity will only impact Eco-Bat fully in 2013 as this
new capacity ramps up. Moody's also notes the EU inspections
carried out September 2012 in relation to competition issues at
several scrap battery purchasers which adds further uncertainty
for the industry. As these factors conspire in 2013, Eco-Bat's
operating performance could remain under significant pressure for
the year.

Eco-Bat's ratings are also under increasing pressure from the
large (PIK) note issued by a holding company above the restricted
group of the 2017 senior notes. In Moody's view, event risk
related to the PIK note is increasing as it accretes towards
EUR1.8 billion at maturity in March 2017, a few days after the
maturity of the 2017 senior notes. Certain outcomes at the
shareholder level, including a change of control following a
default of the PIK, may also affect the restricted group. The
existing significant capacity to pay dividends at restricted
group level -- about GBP390 million at December 2012 - provides
additional uncertainty. Accordingly, this unusually top-heavy
debt structure exerts pressure despite the PIK's lack of any debt
claim into the restricted group.

Moody's considers the prospect for near-term upward rating
migration to be limited in the context of the these
considerations. A prerequisite for upward rating pressure is
greater certainty that Eco-Bat's resources will not ultimately be
used to support the PIK note.

Downward rating pressure could increase if Eco-Bat's operating
performance and credit metrics remain weak in 2013 e.g. if
(adjusted) EBITDA margins remain below 10%. The ratings will also
come under further negative pressure as the PIK note continues to
grow over time and approaches maturity; or following any material
debt-funded acquisition.

Eco-Bat Technologies Ltd.'s ratings were assigned by evaluating
factors that Moody's considers relevant to the credit profile of
the issuer, such as the company's (i) business risk and
competitive position compared with others within the industry;
(ii) capital structure and financial risk; (iii) projected
performance over the near to intermediate term; and (iv)
management's track record and tolerance for risk. Moody's
compared these attributes against other issuers both within and
outside Eco-Bat Technologies Ltd.'s core industry and believes
Eco-Bat Technologies Ltd.'s ratings are comparable to those of
other issuers with similar credit risk. Other methodologies used
include Loss Given Default for Speculative-Grade Non-Financial
Companies in the U.S., Canada and EMEA published in June 2009.

Headquartered in Matlock, UK, Eco-Bat Technologies Limited is the
world's largest producer of lead based on tons sold. Around 88%%
of the company's total lead output is from secondary lead
smelting, which includes the recycling of spent automotive and
industrial lead-acid batteries. The company is privately held,
with 86.7% controlled by its chairman, Howard Meyers, and his
family. For the 12 months to December 2012, Eco-Bat reported
GBP1.7 billion of sales.


EQUINOX PLC: S&P Lowers Rating on Class C Notes to B-
-----------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit ratings on EQUINOX (ECLIPSE 2006-
1) PLC's class A, B, and C notes.  At the same time, S&P has
affirmed its ratings on the class D, E, and F notes.

On Dec. 6, 2012, S&P placed its ratings on the class A, B, and C
notes on CreditWatch negative following an update to its criteria
for rating European commercial mortgage-backed securities (CMBS)
transactions.

The rating actions follow S&P's review of the underlying loans'
credit quality by applying its updated criteria.

The transaction consists of seven loans, of which S&P has
provided information on the four largest loans below.

      ASHBOURNE PORTFOLIO PRIORITY A LOAN (36.2% OF THE POOL)

The securitized loan has an outstanding balance of
GBP72.6 million.  Of the loan, 50% comprises a pari passu loan
(the remaining pari passu loan is securitized in Hercules
(ECLIPSE 2006-4) PLC) and additional subordinated debt of
GBP182.9 million outside this transaction.  The loan is secured
on U.K. 86 nursing homes.

The loan, which matures on Oct. 13, 2015, was transferred to
special servicing in June 2011 due to an event of default on the
whole loan and the subsequent insolvency of the tenant, Southern
Cross.  The loan is currently undergoing a restructuring process.

In January 2013, the servicer reported a securitized loan-to-
value (LTV) ratio of 96%, based on a September 2011 valuation.

            ROYAL MINT COURT LOAN (35.0% OF THE POOL)

The securitized loan has an outstanding balance of GBP70.7
million (83% of the whole loan) and additional debt of GBP14
million, which does not form part of this transaction.

The loan entered special servicing on Dec. 20, 2012, due to a
trigger of the Material Adverse Change covenant arising from a
significant deterioration in the properties' reported market
value of GBP32.5 million (as of April 2012).

The loan, which matures on Oct. 16, 2013, is secured on four
office properties located on the fringe of the City office market
in London.  The multitenanted properties comprise 466,198 sq ft
and are 94% occupied.  The top five tenants account for 89% of
the loan's income, with a weighted-average lease term of 1.2
years until lease break.

In January 2013, the servicer reported a securitized LTV ratio of
218%, based on an April 2012 valuation, and a securitized
interest coverage ratio (ICR) of 1.85x.

           HOLLAND PARK TOWERS LOAN (10.0% OF THE POOL)

The securitized loan has an outstanding balance of GBP20.2
million (85% of the whole loan) and additional debt of GBP3.7
million, which does not form part of this transaction.  The loan
has scheduled amortization and matures in January 2016.

The loan is secured on an office property situated on the north
side of Kensington High Street (London), which was redeveloped in
2005.  The property remains entirely leased to Universal Music
Operations Ltd. (a subsidiary of Vivendi Universal) for a lease
term expiring in 2017 (weighted-average unexpired lease term
equal to 4.3 years).

In January 2013, the servicer reported a securitized LTV ratio of
101%, based on a July 2012 valuation, and a securitized ICR of
1.42x.

                  MACALLAN LOAN (9.8% OF THE POOL)

The securitized loan has an outstanding balance of GBP19.6
million (81% of the whole loan) and additional debt of GBP4.7
million, which does not form part of this transaction.

The borrower of the loan failed to repay in full all amounts
outstanding by the loan maturity date of 15th October 2012 and
the loan is currently in special servicing.

At closing, the loan was secured by 10 office properties in the
U.K.  Since this time eight of the assets have been sold, with
the sale of the two remaining assets (the Birmingham property and
the Tyne & Wear property) recently completed, but the liquidation
proceeds have not been finalized yet.

                 REMAINING LOANS (9.0% OF THE POOL)

The three remaining loans account for about 9.0% of the remaining
pool.  The loans are secured on six mixed-use (retail and office)
U.K. properties.

                         RATING ACTIONS

S&P's ratings in this transaction address the timely payment of
interest and repayment of principal no later than legal final
maturity (January 2018).

S&P considers the available credit enhancement to be insufficient
to absorb calculated losses under its stress scenarios at the
notes' currently assigned rating levels.  S&P has therefore
lowered and removed from CreditWatch negative its ratings on the
class A, B, and C notes.

S&P has affirmed its 'CCC- (sf)' rating on the class D notes, as
it believes this class of notes will experience principal losses
in the near term.

S&P has also affirmed its 'D (sf)' ratings on class E and F notes
due to principal losses on these notes.

EQUINOX (ECLIPSE 2006-1) is a true sale transaction that closed
in July 2006, which was initially backed by a pool of 13 loans
secured on 136 predominantly commercial U.K. properties.  Six of
the loans have repaid since closing.  The outstanding notes'
balance has decreased to GBP199.5 million from GBP401.4 million
at closing.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an property-backed security as defined
in the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.  The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Class      To                 From

EQUINOX (ECLIPSE 2006-1) PLC
GBP401.34 Million Commercial Mortgage-Backed Floating-Rate Notes

Ratings Lowered and Removed From CreditWatch Negative

A          BB (sf)            A+ (sf)/Watch Neg
B          B (sf)             BBB (sf)/Watch Neg
C          B- (sf)            B+ (sf)/Watch Neg

Ratings Affirmed

D          CCC- (sf)
E          D (sf)
F          D (sf)


NORTHERN ROCK: Harbinger Loses Bid to Seek Compensation for Stake
-----------------------------------------------------------------
Kit Chellel at Bloomberg News reports that Harbinger Capital
Partners LLC lost a U.K. appeal seeking compensation for a stake
in Northern Rock Asset Management Plc that was valued as
worthless when the British lender was nationalized in 2008.

Philip Falcone's hedge fund had argued its shares were worth as
much as GBP400 million (US$622 million), Bloomberg relates.
Judge John Mummery upheld the decision on Thursday of a lower
court, Bloomberg discloses.  Andrew Caldwell, an independent
assessor from the accounting firm BDO International, had
determined there was no value in the shares, Bloomberg notes.

"I think that the valuer got it right," Bloomberg quotes Judge
Mummery as saying in a written ruling.

Northern Rock, the first British victim of the credit crisis, was
rescued by the government in February 2008 after customers pulled
GBP4.45 billion of deposits, the first run on a British lender in
more than a century, Bloomberg recounts.  Bloomberg notes that
Harbinger's lawyer, Mark Phillips, said in a 2011 trial that
Caldwell's valuation at the time was "utterly unreasonable."

Operating some 70 branches across the UK, Northern Rock offers
residential mortgages and savings accounts, including variable
cash and fixed-rate Individual Savings Accounts (or ISAs, which
are tax-exempt savings accounts offered in the UK), as well as
bonds and traditional savings accounts.  The bank also offers
financial planning and mortgage-related insurance and life
assurance products through third-party providers.


TAURUS CMBS 2006-2: S&P Lowers Rating on Class A Notes to 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered and removed from
CreditWatch negative its credit rating on Taurus CMBS (U.K.)
2006-2 PLC's class A notes.  At the same time, S&P has affirmed
its ratings on the class B, C, and D notes.

The rating actions follows S&P's review of the underlying loans'
credit quality by applying its updated criteria for rating
European commercial mortgage-backed securities (CMBS)
transactions.

On Dec. 6, 2012, S&P placed its ratings on the class A notes on
CreditWatch negative following the update to its European CMBS
criteria.

               MAPELEY STEPS LOAN (66.2% OF THE POOL)

The Mapeley Steps loan, which is the largest loan in the pool,
has a GBP150.8 million outstanding balance and matures in April
2021.

The loan is secured on a portfolio of 99 properties.  The
properties are predominantly U.K. office buildings.  Of the
portfolio, 93% is let to Her Majesty's Revenue and Customs
(HMRC). The lease expires (eight years unexpired) on the same day
as the loan matures.

In January 2013, the issuer reported a securitized loan-to-value
(LTV) ratio of 35.5%, based on a June 2012 valuation, and a
securitized interest coverage ratio (ICR) of 1.61x.

               TIMES SQUARE LOAN (16.3% OF THE POOL)

The securitized loan has a GBP37.1 million outstanding balance
(74% of the whole loan) and additional debt of GBP13.1 million,
which does not form part of this transaction.

By the Nov. 25, 2012 loan maturity date, the borrower had failed
to fully repay all outstanding amounts.  The loan is in special
servicing.

The loan is secured on a shopping center situated in Sutton,
Surrey.  The Times Square Shopping center comprises 190,000
square feet of retail accommodation, as well as a 29,000 sq. ft.
self-contained office building.  The multitenanted property is
currently 69% occupied, with a weighted-average lease term of
five years and four months until lease break.

In January 2013, the issuer reported a 235% securitized LTV
ratio, based on a July 2012 valuation, and a securitized ICR of
0.67x.

               IRON MOUNTAIN LOAN (13% OF THE POOL)

The securitized loan has a GBP29.5 million outstanding balance
(85% of the whole loan) and additional debt of GBP5.2 million,
which does not form part of this transaction.  The loan matures
on July 20, 2014.

The loan is secured on a single distribution warehouse in the
Isis Reach development in Belvedere, Kent.  The property was
initially developed in 2002 and it was extended in 2006 to
provide a leaseable area of 349,953 sq ft.

The property remains entirely leased to Iron Mountain UK Ltd. for
a term expiring in December 2031.  It has an 18.8 year weighted-
average unexpired lease term (WAULT).

In January 2013, the issuer reported a 73.78% securitized LTV
ratio, based on a December 2010 valuation, and a securitized ICR
of 1.59x.

                  DUNDEE LOAN (4.5% OF THE POOL)

The securitized loan has an outstanding balance of GBP10.3
million (75% of the whole loan) and additional debt of GBP3.5
million, which does not form part of this transaction.

By the Sept. 15, 2012 loan maturity date, the borrower failed to
fully repay all outstanding amounts.  As a result, the loan is in
special servicing.

The loan is secured by a single office property located in
Dundee, Scotland.  The property was constructed in 2001 and has a
total net internal area of 126,233 sq ft, as well as 400 car
parking spaces.

The property remains entirely leased to NCR Financial Solutions
Group Ltd. for a term expiring in November 2026, with a 13.75
year WAULT.  The tenant has a break option in November 2016,
leading to a 3.75 year WAULT.

In January 2013, the issuer reported a 89.56% securitized LTV
ratio, based on an April 2012 valuation, and a 4.05x securitized
ICR.

                          RATING ACTIONS

S&P's ratings in this transaction address the timely payment of
interest and repayment of principal no later than legal final
maturity in April 2024.

S&P considers the available credit enhancement to be insufficient
to absorb calculated losses under its stress scenarios at the
class A notes' currently assigned rating level.  S&P has
therefore lowered to 'BB (sf)' from 'A (sf)' and removed from
CreditWatch negative its rating on the class A notes.

S&P has affirmed its 'CCC+ (sf)' rating on the class B notes, as
it believes this class of notes will experience principal losses
in the near-to-medium term.

S&P has affirmed its 'CCC- (sf)' ratings on the class C and D
notes, as it believes these notes will experience principal
losses in the near term.

Taurus CMBS (U.K.) 2006-2 is a 2006-vintage CMBS transaction
backed by four senior loans secured on 102 U.K. commercial
properties.

          STANDARD & POOR'S 17G-7 DISCLOSURE REPORT

SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an property-backed security as defined
in the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.  The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.

If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:

            http://standardandpoorsdisclosure-17g7.com

RATINGS LIST

Rating

Class       To                From

TAURUS CMBS (U.K.) 2006-2 PLC
GBP447.15 Million Commercial Mortgage-Backed Floating-Rate Notes

Rating Lowered and Removed From CreditWatch Negative

A           BB (sf)           A (sf)/Watch Neg

Ratings Affirmed

B           CCC+ (sf)
C           CCC- (sf)
D           CCC- (sf)


* UK: Fewer Companies Go Bust in Scotland, Experian Index Shows
---------------------------------------------------------------
Scott Reid at The Scotsman reports that latest business
insolvency index from credit rating specialist Experian shows
fewer companies in Scotland are going bust in comparison with
other parts of the UK.

Scotland had the lowest insolvency rate of the 11 geographic
areas under examination -- 0.03% of the business population in
March against a UK-wide figure of 0.08%, according to the
Scotsman.

The report echoes recent official figures from the Accountant in
Bankruptcy, which showed sharp falls in the month-on-month and
year-on-year rates of Scottish business failures, the Scotsman
notes.

According to the Scotsman, Max Firth, managing director, Experian
Business Information Services, said: "The fact that mid-tier
businesses are seeing lower rates of insolvency is encouraging.
These companies have struggled more than most during the
recession as they are not necessarily small enough to be
flexible, but are also not big enough to benefit from economies
of scale.

"The overall rate of insolvencies for the first three months of
2013 is a significant improvement on the equivalent months in
2012.

"The figures . . . suggest that companies are becoming much
better at anticipating risk, getting their credit policies in
shape and developing better relationships with customers."

Building and construction saw a large year-on-year fall in the
insolvency rate, the Scotsman states.



===============
X X X X X X X X
===============


* EUROPE: Lawmakers Seek Powers to Enforce Bank Writedown Law
--------------------------------------------------------------
Jim Brunsden at Bloomberg News reports that a legislator in
charge of work on the rules said European Union lawmakers want
regulatory powers that will force unsecured creditors of failing
banks to incur losses to take effect in mid-2016.

According to Bloomberg, Gunnar Hoekmark said in an interview on
Wednesday that the European Parliament's largest political groups
agreed that the so-called bail-in powers, part of a draft law for
winding down crisis-hit lenders, should take effect on July 1,
2016.  Mr. Hoekmark, as cited by Bloomberg, said that the
parliament's economic and monetary affairs committee is set to
vote on the policy on May 20.

Mr. Hoekmark said that the assembly will seek to ensure that the
law sets out a clear process for imposing losses on creditors,
Bloomberg notes.

National governments and the parliament are facing a June
deadline set by EU leaders for a deal on the law, which is
intended to take taxpayers off the front line for incurring the
costs of the banking crisis, Bloomberg says.  Finance ministers
are scheduled to discuss the plans next week, Bloomberg
discloses.

In the European Commission's original draft of the legislation,
published last year, a bank's unsecured senior creditors could
have their claims written down by regulators, or converted into
equity, as part of efforts to stabilize or safely wind down a
lender, Bloomberg recounts.  Losses would be imposed on them
after the bank's capital and subordinated debt holders have been
wiped out, Bloomberg states.

Bloomberg notes that while some nations, including France and
Spain, back the original proposal for the bail-in powers to take
effect from Jan. 1, 2018, Germany and the European Central Bank
have called for an earlier 2015 deadline.

Mr. Hoekmark said that Parliament's May vote will set for stage
for negotiations with governments on the final version of the
law, Bloomberg relates.



* EUROPE: Building Materials Sector Rely on US Housing Recovery
---------------------------------------------------------------
European building materials companies' performance and their
ability to successfully deleverage in 2013 will be supported by
the continued recovery of the US private residential market and
on strong trading conditions in Asia and Latin America, says
Moody's Investors Service in a entitled "US Housing Recovery to
Support European Building Materials Producers in Stress Test
Scenarios."

"We expect to see stronger results from European building
materials companies in 2013 than a year ago given that cement
volumes are likely to improve by the low- to mid-single-digits in
the US," says Stanislas Duquesnoy, a Vice President - Senior
Credit Officer in Moody's Corporate Finance Group and co-author
of the report. "An additional boost from emerging markets in Asia
and South America could also to lift their revenues, although
Middle Eastern and Northern African countries remain volatile due
to political instability."

In Europe, Moody's expects demand for building materials to
remain lackluster in 2013 across most markets, even in
historically resilient markets such as Germany and France, but
the decline in cement volumes in Western Europe will be less than
in 2012.

Against this backdrop, Moody's has assessed the credit and
ratings impact on this sector based on two assumptions related to
volumes, prices and cost inflation.

Moody's 'base-case scenario' forecasts volume increases between
1%-5%, depending on the individual companies' geographic
footprint and product slate. Under this scenario, rated issuers'
credit metrics would improve modestly, supported by low-single-
digit volume growth and continued modest improvement in EBITDA
margins. Upward pressure on most ratings would remain limited.
Holcim Ltd. (Baa2 stable) and Heidelberg Cement AG (Ba1 stable)
would retain the most headroom in their respective categories.
CRH plc (Baa2 stable) and Lafarge SA (Ba1 stable) would be
adequately positioned in their rating categories assuming they
continue to restrain discretionary cash outflows. Italcementi
S.p.A. (Ba2 negative) would continue to be pressured in its
rating category and might need to undertake further cost
optimization measures to stabilize its credit profile.

Moody's 'downside scenario' forecasts a 3% decline in volumes on
average, on a global basis. The rating agency considers this
scenario relatively unlikely at this stage given the weak
comparison basis for Europe for 2013 and the positive US Q1
housing starts data.

If the downside scenario were to materialize, most ratings would
turn out to be weakly positioned. Italcementi would face the most
pressure and would be challenged to stabilize its credit profile.
CRH, HeidelbergCement and Lafarge would all be weakly positioned
but should have the flexibility to reduce costs and discretionary
cash outflows to maintain their current ratings. Holcim would
remain adequately positioned within its rating category

Moody's assumes relatively benign cost inflation in both
scenarios and continuous operating margin accretion following an
inflection point that has been reached in H1 2012.


* Moody's Expects Low Repayment Rate for European CMBS Loans
------------------------------------------------------------
With loan maturities peaking in 2013, the repayment rate for
European commercial mortgage-backed security (CMBS) loans
maturing in Q2 2013 will remain at the historically low levels of
Q1 2013, says Moody's Investors Service in a Sector Comment
report entitled "European CMBS Loan Maturities Update: Loan
Repayment Rate to Remain Low in Q2 2013, after Q1 2013 Drop."
Repayment rate dropped to 29% in Q1 2013 from 35% in 2012.

"We base our expectations on the specific characteristics of the
loans with original scheduled maturity dates in Q2 2013 and
Europe's weak macroeconomic outlook," says Andrea Daniels, a
Moody's Senior Vice President - Manager and author of the report.
"An additional factor underpinning our expectations is the
constrained lending environment for commercial real estate
combined with the CMBS real estate assets' predominantly
secondary quality."

In Moody's view, 24 loans (EUR2.6 billion) with scheduled
maturity dates in Q2 2013 will likely not repay because the loans
have both higher Moody's loan-to-value (LTV) ratios and lower
Moody's debt yield than the 34 loans that matured in Q1 2013.

Moody's LTV is the key determinant of whether loans 1) default or
repay with a loss or 2) prepay, repay at maturity or extend.
Ninety-five percent of loans with a Moody's LTV higher than 100%
either defaulted or repaid with a loss. Furthermore, all loans
with a Moody's LTV below 65% either repaid at maturity or the
lender extended them.

Moody's debt yield is also relevant in predicting outcome. In Q1
2013, Moody's debt yield stood at 7.2% for defaulted loans in
contrast to 11.7% for loans that repaid at maturity.


* Fitch Says European Lost Decade Would Leave Few Firms Unscathed
-----------------------------------------------------------------
A decade of zero or low growth in Europe would weigh on most of
the continent's corporate sector, but the scale of the impact
would vary significantly, Fitch Ratings says. A scenario analysis
of the potential winners and losers from a Japan-style lost
decade puts utilities and telecom companies among those most at
risk, while the gaming sector could benefit from deregulation as
governments search for ways to increase tax revenues.

Fitch says "In a special report "Scenario: Effects of a European
Lost Decade on Corporates" published May 8, we examine the
similarities and differences between Japan in the early 1990s and
the current conditions in Europe, as well as how European
companies would cope with zero growth across the EU until 2018. A
lost European decade is however not Fitch's baseline assumption.
We expect a recovery to come much sooner, with the eurozone
returning to modest growth in 2014.

"As well as the specific sector a company operates in, the
primary factors determining the impact of a lost decade would be
how reliant it is on sales in the slowest-growing developed
European markets and the location of its major cost bases.

"Utilities, with their exposure to big, developed markets and
their necessarily-local cost bases are high on the list of
sectors that suffer as growth slows, demand falls and power
prices weaken. On top of that, they would also face the risk of
additional taxation and further regulatory intervention if
governments took action to ensure bills remained affordable for
consumers. The five largest Fitch-rated utilities (Electricite de
France, Enel, E.ON, Iberdrola and RWE) all have stubbornly high
net debt, leaving them with limited rating headroom if conditions
deteriorate further.

"Telecom companies could face similar pressures due to the
location of their customers and cost bases, though this would be
tempered by the growth in international assets for some groups. A
prolonged downturn would also compound the existing challenge of
high investment requirements, driven by spectrum acquisition and
the need to upgrade mobile networks to the latest technology.

"In our analysis, gaming companies would continue to benefit from
government deregulation as they would be seen as a potential
source of additional taxation revenue. This would enable
companies to expand into new businesses and markets, more than
offsetting weaker consumer confidence."


* BOOK REVIEW: The Oil Business in Latin America: The Early Years
-----------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher

Buy a copy for yourself and one for a colleague on-line at
http://www.beardbooks.com/beardbooks/oil_business_in_latin_americ
a.html

This book grew out of a 1981 meeting of the American Historical
Society.  It highlights the origin and evolution of the
stateowned
petroleum companies in Argentina, Mexico, Brazil, and
Venezuela.

Argentina was the first country ever to nationalize its
petroleum industry, and soon it was the norm worldwide, with the
notable exception of the United States.  John Wirth calls this
phenomenon "perhaps in our century the oldest and most
celebrated of confrontations between powerful private entities
and the state."

The book consists of five case studies and a conclusion, as
follows:

* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)

The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review.  They also examine the four
interconnecting roles of a state-run oil industry and
distinguish them from those of a private company.  First, is the
entrepreneurial role of control, management, and exploitation of
a nation's oil resources.  Second, is production for the private
industrial sector at attractive prices.  Third, is the
integration of plans for military, financial, and development
programs into the overall industrial policy planning process.
Finally, in some countries is the promotion of social
development by subsidizing energy for consumers and by promoting
the government's ideas of social and labor policy and labor
relations.

The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region.  Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.
Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry.  Mr. Wirth describes the politics
and individuals behind the privatization of Brazil's oil
industry leading to the creation of Petrobras in 1953.  Mr. Duran
notes the wrangling between provinces and central government in
the evolution of Pemex, and in other Latin American countries.
Mr. Lieuwin discusses the mixed blessing that oil has proven for
Venezuela., creating a lopsided economy dependent on the ups and
downs of international markets.  Mr. Saunders concludes that many
of the then-current problems of the state oil companies were
rooted in their early and checkered histories."  Indeed, he says,
"the problems of the past have endured not because the public
petroleum companies behaved like the public enterprises they
are; they have endured because governments, as public owners,
have abdicated their responsibilities to the companies."
189

Jonh D. Wirth is Gildred Professor of Latin American Studies at
Standford University.


                            *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than US$3 per
share in public markets.  At first glance, this list may look
like the definitive compilation of stocks that are ideal to sell
short.  Don't be fooled.  Assets, for example, reported at
historical cost net of depreciation may understate the true value
of a firm's assets.  A company may establish reserves on its
balance sheet for liabilities that may never materialize.  The
prices at which equity securities trade in public market are
determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Thursday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com

Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/booksto order any title today.


                            *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Rousel Elaine T. Fernandez,
Joy A. Agravante, Ivy B. Magdadaro, Frauline S. Abangan and Peter
A. Chapman, Editors.

Copyright 2013.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000 or Nina Novak at
202-241-8200.


                 * * * End of Transmission * * *